How to Analyze a Multi Building Multifamily

6 Replies

So far, I've been using the BP calculators to analyze single family homes.  Recently ran across a multi building, multifamily package deal that promises a great return (by the realtor) to an investor.  It's made up of triplexes, 4-plexes, and apartments.  Total 42 doors.  

My question: What, if anything, is different when analyzing multifamily projects than single family homes.

Thanks for your input, any guidance is greatly appreciated.

Read Multifamily Millions by David Lindahl and follow his methodology of repositioning a value play.  I have been following his strategy for the 8 apartment complexes I currently hold for 122 front doors.  

Swanny

Thanks Swanny,

Looked for the book on Audible, BP Store and my library.  Found it on Amazon and ordered it.  Also did a BP search and found a complete outline of the book by BP Pro member Ernesto Hernandez.  He also recommends it.  

Thanks for the help,

Gotta go now.  Podcast #238 is queueing up.

I second that book recommened by @Michael Swan . I just finished reading it, and it is fantastic. The biggest take-away from the book is the possibility to do value add plays by increasing the NOI. If you can find ways to do that by raising rents / income and/or lowering expenses, you can find hidden gems. Larger apartments are valued by the formula NOI / Cap rate. Purchase the property based on current performance (not pro forma, but actuals) and not on potential performance.  

Frankie